How severe supply shortages are driving Townsville’s booming property market

REA senior economist Eleanor Creagh has given an update on Townsville’s property market

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Townsville has cemented its status as one of regional Queensland’s hottest property markets, with home values surging 17.29 per cent over the past year.

Defying cost of living pressures, rising interest rates, and global uncertainty, PropTrack’s Home Price Index for March reveals Townsville’s median home value has now hit $627,000.

The northern hub outperformed the national average, recording 3.55 per cent growth over the past quarter alone and driving regional Queensland’s status as a top-performing market.

REA Group senior economist Eleanor Creagh said while some markets nationally were shifting into a slower-growth phase, chronic supply shortages were cushioning any potential price falls in high-demand regional pockets.

A unit for sale at 8/13 Albert St, Cranbrook is priced at $399,000

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“Recent rate rises will weigh on buyer sentiment, borrowing capacity, and erode already poor affordability, though a resilient labour market, population growth and first-home buyer support continue to underpin demand against limited supply,” Ms Creagh said.

She noted that nationally, the market was seeing a “clear turning point” as higher interest rates took hold, but regional Queensland continued to show strength.

Real Estate Institute of Queensland (REIQ) CEO Antonia Mercorella said Townsville’s extraordinary property price growth was being driven by severe, persistent supply pressures and strong buyer demand.

“The established housing market is still drip-feeding properties for sale but remains restricted as property owners hold on tight to their homes,” Ms Mercorella said.

This home at 200 Ross River Rd, Aitkenvale is priced around $650,000

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She noted regional Queensland property listings plunged 15 per cent late last year, with recent data showing the shortfall continuing well into 2026.

“These persistent supply pressures are what’s underpinning property price growth, along with ongoing demand-side factors such as high interstate migration, expected strong population growth, and rental market strain seeing tenants transition to home ownership,” she said.

Ms Mercorella said efforts to boost local housing stock were being hampered by the escalating cost of construction.

39 Yule St, Picnic Bay was just listed via an expressions of interest campaign

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“While we’re all feeling the impact of global conflict at the petrol pump, the flow on inflationary impact to manufacturing and construction, through higher transport and logistics costs, couldn’t come at a worse time,” she said.

“We’re already up against low productivity, rising material costs, and dire labour shortages.”